THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING HO CHI MINH UNIVERSITY OF BANKING NGUYỄN THỊ TƯỜNG VY INFLUENCE OF FINANCIAL LITERACY AND FINANCIAL ATTITUDE ON FINANCIAL BEHAVIORS OF STUDENTS IN HO CHI MINH CITY GRADUATION THESIS MAJOR: FINANCE – BANKING CODE: 7340201 HO CHI MINH CITY, 2022 THE STATE BANK OF VIETNAM MINISTRY OF EDUCATION AND TRAINING HO CHI MINH UNIVERSITY OF BANKING NGUYỄN THỊ TƯỜNG VY INFLUENCE OF FINANCIAL LITERACY AND FINANCIAL ATTITUDE ON FINANCIAL BEHAVIORS OF STUDENTS IN HO CHI MINH CITY GRADUATION THESIS MAJOR: FINANCE – BANKING CODE: 7340201 SUPERVISOR NGUYEN THI MY HANH, PHD HO CHI MINH CITY, 2022 i ABSTRACT The thesis studies the impact of financial literacy and financial attitude on financial behaviors. This empirical study was conducted on students at Ho Chi Minh University of Banking and students at universities in Ho Chi Minh City to explain the financial behaviors of students, which are rarely chosen as research subjects. Using quantitative research method, the research paper distributes online questionnaires to students to answer online, then from the collected data, the research uses EFA method to process and analyze data. The results found that financial literacy and financial attitude had no impact on students' financial behaviors.
Some recommendations for improving financial literacy indicators, financial attitude and financial behaviors for students will also be discussed. ii AUTHOR’S DECLARATION I hereby confirm that this thesis entitled “Influence of financial literacy and financial attitude on financial behaviors of students in Ho Chi Minh City”, is my own work, and none of this work has been published before submission. Ho Chi Minh City, August 2022 NGUYEN THI TUONG VY iii ACKNOWLEDGEMENTS I would like to express my deep gratitude to all the teachers at Ho Chi Minh University of Banking who have always been dedicated to imparting and teaching me a lot of useful knowledge and skills, and always creating favorable conditions for me to learn and develop. I would like to sincerely thank Dr.
Nguyen Thi My Hanh for always accompanying and supporting me in the process of completing my graduation thesis. The contributions of Dr. Nguyen Thi My Hanh are valuable knowledge for my thesis. Finally, I would like to thank my family for always supporting me as well as those who participated in the survey so that I could complete the thesis.
iv TABLE OF CONTENTS ABSTRACT. i LIST OF ACRONYMS. vii LIST OF FIGURES. viii LIST OF TABLES.
ix CHAPTER 1: INTRODUCTION .1 Rationale of the study .2 Research objectives and questions .4 Research subject and scope.6 Structure of the thesis .4 Summary of Chapter 1 .5 CHAPTER 2: LITERATURE REVIEW .1 Guiding conceptual framework .5 Financial literacy and its significant association with financial behavior 10 2.6 Financial attitude and its significant association with financial behavior11 2.7 Review of previous studies .12 Summary of Chapter 2 .2 Hypotheses and proposed model .3 Sample and sample size .5 Research variables and scale design .1 Build and verify the quality of the scale .2 Exploratory Factor Analysis .3 Multivariate linear regression analysis .24 Summary of Chapter 3 .25 CHAPTER 4: RESEARCH RESULTS AND DISCUSSION .1 Results obtained at Ho Chi Minh University of Banking .1 Characterisctics of sample .2 Verify the quality of the scale .3 Exploratory Factor Analysis .5 Multivariate linear regression analysis .2 Results obtained at other universities in Ho Chi Minh City .1 Characteristics of sample .2 Verify the quality of the scale .3 Exploratory Factor Analysis .5 Multivariate linear regression analysis .50 Summary of Chapter 4 .54 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS .3 Limitations and future research directions .58 Summary of Chapter 5 .67 vii LIST OF ACRONYMS Acronyms Meaning EFA Exploratory Factor Analysis FA Financial attitude FB Financial behaviors FL Financial literacy TPB Theory of planned behavior TRA Theory of reasoned action viii LIST OF FIGURES Figure 2.1: Theory of planned behavior .2: Adaptation of the Deacon- Firebaugh Model .2: Proposed research model .3: The process of developing the questionnaire .4: Summary of research variables .5: Measurement scale and code of variables .6: Reliability scores and meaning. 21 ix LIST OF TABLES Table 4.1: Characterisctics of sample .2: Scale reliability testing of financial attitude .3: Scale reliability testing of financial literacy .4: Scale reliability testing of financial behavior .5: Exploratory factor analysis for independent variables .6: Exploratory factor analysis for dependent variable .11: Characterisctics of sample .12: Scale reliability testing of financial attitude of other universities .13: Scale reliability testing of financial literacy of other universities .14: Scale reliability testing of financial behavior of other universities .15: Exploratory factor analysis for independent variables of other universities .16: Exploratory factor analysis for dependent variables of other universities .17: Pearson correlation of other universities .18: Model summary of other universities .19: ANOVA of other universities .20: Coefficients of other universities .21: Summary of research results. 49 1 CHAPTER 1: INTRODUCTION Chapter 1 discusses why this topic was chosen, as well as an outline of the study objectives, research questions, methodologies, subject and research scope. Furthermore, it discusses the research's importance in terms of academics and practice.
Finally, it sketches out the study's structure.1 Rationale of the study In daily life, people need to make financial decisions such as borrowing, investing, saving and retirement. In addition to a certain understanding of the market, each individual needs to have an understanding of other aspects of finance, also known as financial literacy. INFE (2011) defines financial literacy as “ a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing.” The benefits of financial literacy are manifold. Individuals with good financial literacy and schooling have better pension contributions and retirement planning (Behrman et al., 2012; Lusardi and Mitchell, 2014).
Moreover, the greater financial literacy the better the risks people can reduce. People with lower numerical ability default their mortgage as their behavior do not related to their choice (Gerardi, Goette, and Meier, 2013). Financial literate people place higher standard when choosing funds to diversify their savings (Hastings and Mitchell, 2011; Hastings, Mitchell, and Chyn, 2011; Hastings and Tejeda-Ashton, 2008). With the benefits that financial literacy brings to life today is undeniable, but for a developing country like Vietnam, the number of people with financial literacy is still low.
The average financial knowledge score of Vietnamese people is around 4.4 percentage higher than 2019 but this score mainly come from people who live in Hanoi and Ho Chi Minh city (Morgan and Trinh, 2020). In fact, self- employed workers and salaried workers are those who had higher levels of financial literacy than any other employment (Morgan and Trinh, 2019). As the matter of 2 fact, Vietnamese students show low level of financial literacy, even at the basic level (Nguyen, 2015). There are few studies that show concern in financial knowledge of Vietnamese students or students in Ho Chi Minh City.
Therefore, this issue has not been paid enough attention. The current state of financial literacy and financial education in Vietnam, the importance of a financially literate population, and the positive impact of financial education on financial literacy all point to an urgent need to promote financial education in order to improve Vietnamese financial literacy. Simultaneously, students should receive special attention in terms of financial education because they represent the country's future generation. According to a preliminary examination of the literature, previous research have mostly focused on understanding and modeling a certain sort of measure financial literacy of Vietnamese students and adults.
There has been little progress in comprehensively identifying distinct limitations based on their features. So far, (Nguyen, 2015) evaluates the level of financial literacy of adults in 2 big cities Hanoi and Ho Chi Minh city. Morgan and Trinh (2020) find the link between financial literacy and the adoption of fintech products. Financial literacy, financial major, financial attitude and advanced financial behaviour had effect on personal savings behaviour in Vietnam (Nguyen and Doan, 2020).
In summary, there is a need to understand and measure the financial literacy of students in Ho Chi Minh City and because of it the author present the research: Influence of financial literacy and financial attitude on financial behaviors of students in Ho Chi Minh City.2 Research objectives and questions 1.1 General objective On the basis of actual situation research, the aim of the thesis is to find the relationship between financial literacy, financial attitude and financial behaviors.2 Specific objectives To achieve the general objective, the thesis identifies two specific goals to be achieved: First, examine the influence of financial literacy on financial behaviors of students in Ho Chi Minh City. Second, examine the influence of financial attitude on financial behaviors of students in Ho Chi Minh City.3 Research questions To achieve the specific objectives, the thesis will answer the following research questions: (1) Does financial literacy affect the financial behaviors of students at universities in Ho Chi Minh City? (2) Does financial attitude affect the financial behaviors of students at universities in Ho Chi Minh City? 1.4 Research subject and scope According to the content presented in section 1.2, previous studies in Vietnam have not analyzed the impact of financial literacy and financial attitude on financial behaviors of students in Ho Chi Minh City. Therefore, this thesis is based on students in Ho Chi Minh City. Primary data was collected through a survey from September 2021 to December 2021.5 Research methodology The thesis was carried out based on two research methods including quantitative research method and synthetic and statistical method, specifically as follows: Quantitative research: Used to assess the factors influencing the financial behaviors of students in Ho Chi Minh City.
The quantitative research sample was collected using a suitable sampling approach, with a sample size of 508 participants projected. Data was gathered through survey using a pre-designed questionnaire that was emailed to students for them to complete and obtain findings instantly. The collected data were analyzed using SPSS 26.0 software, which included a Cronbach's Alpha test to determine the reliability of the scales. EFA with Bartlett test and KMO is an exploratory factor analysis.
F-test and Sig significant level are used in regression analysis to determine the effect on financial behaviors of students in Ho Chi Minh City. Synthetic and statistical method: After using SPSS to run the results and analyze, the synthetic and statistical method helps the author to have a better overview of the data to give some suitable solutions.6 Structure of the thesis The thesis is divided into 05 chapters, which are as follows: Chapter 1: Introduction This chapter provides an overview of the topic, including: reasons for selecting the topic, research problem, research objectives, research questions, subject and scope of the research, research methodology and the structure of the thesis. Chapter 2: Literature review In this chapter, the thesis presents previous studies on the concept of financial literacy, financial attitude and financial behavior. In addition, this chapter 5 also presents the results of previous studies on the relationship between financial literacy and financial behavior, financial attitude and financial behavior and the impact of financial literacy, financial attitude on financial behaviors.
Chapter 3: Methodology From the theoretical framework in Chapter 2, this chapter presents the hypotheses, research models and data collection methods for the research process. Chapter 4: Research results and discussion This chapter focuses on interpreting and analyzing the results obtained after running SPSS. Chapter 5: Conclusions and recommendations This chapter summarizes the results obtained through the research paper and proposes some recommendations to improve the indicators of financial literacy, financial attitude and financial behaviors for students in Ho Chi Minh City. Summary of Chapter 1 Chapter 1 gives a brief overview of the topic.
The next chapter will examine more closely the concepts and relationships between financial literacy, financial attitude and financial behaviors from previous studies.